PDs tax cut plan

Sam Vimes

i decided to respond after all

Earthman wrote:

Prove it-otherwise you are posting opinion as fact which is against the rules around here.

[sarcasm]and you've conclusively and systematically proved everything you've said in this thread of course [/sarcasm]

Earthman wrote:

and low income tax assured people stayed here to take up the jobs.

[sarcasm]of course, the sole reason choose not to move abroad is low tax. if it goes to 43% i'm off to new zealand[/sarcasm]

Earthman wrote:

Well what was the reason,you seem to know but are keeping it a secret...

i'm not keeping anything a secret, you're just skipping over parts of my posts. this is the bit that made me decide you're a troll

Earthman wrote:

So you are saying government services have become more expensive due to tax cuts? How and where are you getting that from?

i'm getting that from your own statement. you said that the money has to come from somewhere, so if they drop income tax, other things have to cost more

Earthman wrote:

No I'm asking you to show me why you think this will happen when all precedent shows the opposite.

you're "precedent" has showed that revenue increases when during an economic boom and nothing else

Earthman wrote:

Governments have cut taxes consistently in the last 15 years and they've always ended up with more money.
Why? because the tax cuts injected money into the economy and it grew leading to more tax income on that bigger economy at lower rates.

THEY'VE ENDED UP WITH MORE MONEY BECAUSE FOREIGN CORPORATIONS LOCATED HERE AMONG MANY OTHER FACTORS THAT SAMB MENTIONED. LOWER TAX DOES NOT AUTOMATICALLY CAUSE AN ECONOMIC BOOM. STOP SAYING IT DOES

Earthman wrote:

The corporations came here because of the available labour force and low corporation tax.

agreed

Earthman wrote:

In the 1980's that labour force emmigrated because taxes were too high.

[sarcasm]yes, everyone who emigrated left because of taxes. and all the nigerians who are emigrating from their country are doing so because of taxes. all emmigration is caused by high tax[/sarcasm]

Earthman wrote:

What are you saying,the government should buy peoples school books ?

well, yes, that's the point of free education.

Earthman wrote:

You've not shown how government services become more expensive simply due to tax cuts.

yes i have

Earthman wrote:

I think you are trying to say that , tax cuts lead to charges for services.
They dont.
Charges for services are a policy.One is not caused by the other.

i know they'd charge anyway, the point is how much they'd charge. if their buget is cut, where else are they to make up the money?

Earthman wrote:

Tax cuts are a known fiscal mesure to boost growth in the economy.
Growth brings more tax revenue.That has been shown to be the case.
I'll give you another basic lesson in Economics.
They are free today but I might have to charge for them later
The costs of services are rising with various services as a result of normal everyday events (oil,labour etc).The money available to the government is rising due to a growing economy,the more money you give people to spend, the more it will grow.

that's some nice rambling. i know people have more money. that's due to the better economy which, no matter what you say, is not due to tax cuts.

and tell me, if you give someone €10 more from income tax, but take €20 in the stealth taxes that you admitted will result from it, where's all extra money they're spending coming from?

Earthman wrote:

It's better to run services more effeciently than peg money at them to keep them going.Unfortunately more of the latter seems to be happening than the former.
To be honest with you thats where I'd be concentrating my angst if I were you because thats the root of the problem not the lowering of personal tax rates.

you keep going on about inefficiences and how the hospital staff need to work better. i don't care about govt excuses. here's the options:

1. increase the budget and build more inefficient hospitals

2. leave it as it is and moan that they should handle more patients than the hospitals were ever meant to while people die

Earthman wrote:

and the implication is that we should raise taxes instead of putting a few cent on the price of a stamp...

put a few cent on the price of a stamp
and bus fare
and school books
and college fees
and vat
and fuel tax
etc etc etc etc etc etc etc etc etc etc etc etc etc etc etc

Earthman wrote:

If you think that policy would run with the voters, well good luck to you with the vote hunting...

i'm 100% sure voters would hate it. that doesn't mean its the wrong course of action

Sam Vimes

Earthman wrote:

Oh I understand that.I was keeping things simple for commander Vimes to be honest.

at this point, i'm prepared to say f uck you you little p rick. and if any mod wants to ban me for it, read back at the many times he insulted me on this thread. he consistently confuses random insults with arguments

mickcarroll10

Commander Vimes wrote:

at this point, i'm prepared to say f uck you you little p rick. and if any mod wants to ban me for it, read back at the many times he insulted me on this thread. he consistently confuses random insults with arguments

This guy should be banned,not for his abuse but because he is making up things and calling them facts.

Right enough is enough.

Commander Vimes consider yourself permanently banned from this board.

Commander Vimes

Commander Vimes wrote:

[sarcasm]and you've conclusively and systematically proved everything you've said in this thread of course [/sarcasm]

I've backed up opinion with facts yes.

[sarcasm]of course, the sole reason choose not to move abroad is low tax. if it goes to 43% i'm off to new zealand[/sarcasm]

Yes the 1980's never happened, it was an illusion :rolleyes: There were no crippling taxes, there was no mass emmigration :rolleyes:

i'm not keeping anything a secret, you're just skipping over parts of my posts. this is the bit that made me decide you're a troll

LoL

i'm getting that from your own statement. you said that the money has to come from somewhere, so if they drop income tax, other things have to cost more

Complete nonsense.

you're "precedent" has showed that revenue increases when during an economic boom and nothing else

More nonsense,it shows how you can grow an economy when it needs to grow.

THEY'VE ENDED UP WITH MORE MONEY BECAUSE FOREIGN CORPORATIONS LOCATED HERE AMONG MANY OTHER FACTORS THAT SAMB MENTIONED. LOWER TAX DOES NOT AUTOMATICALLY CAUSE AN ECONOMIC BOOM. STOP SAYING IT DOES

Dealt with that, no need to shout.

[sarcasm]yes, everyone who emigrated left because of taxes. and all the nigerians who are emigrating from their country are doing so because of taxes. all emmigration is caused by high tax[/sarcasm]

Next you'll be comparing the nigerian weather with the Irish weather...
It would be about as relevant :rolleyes:

i know they'd charge anyway, the point is how much they'd charge. if their buget is cut, where else are they to make up the money?

For the umpteenth time... you've not shown how lowering taxes leads or will lead to a smaller public purse.You would need to show that to make the point you were trying to make.

that's some nice rambling. i know people have more money. that's due to the better economy which, no matter what you say, is not due to tax cuts.

Yeah, you've shown that I dont think... and without name calling etc etc etc :rolleyes:

and tell me, if you give someone €10 more from income tax, but take €20 in the stealth taxes that you admitted will result from it, where's all extra money they're spending coming from?

I'd have to see the analysis that showed that an average family is worse off in real terms since taxes started to fall as opposed to the point where we are at now rather than your hypotheticals.
Anyone can bandy about hypotheticals instead of analyising facts.
But those that do are only demonstrating the weaknesses in their own arguments.
There are many things wrong with society and many things that need fixing and tweeking,I've not denied that.

murphaph

Commander Vimes wrote:

at this point, i'm prepared to say f uck you you little p rick. and if any mod wants to ban me for it, read back at the many times he insulted me on this thread. he consistently confuses random insults with arguments

D'oh! Always know who moderates what Commander

Zaphod

Victor wrote:

Tax-cuts only benefit those "rich" enough to be paying tax in the first place.

The Americans brought in a form of tax credit (Earned Income Tax Credit) whereby even people who didn't pay any tax could get the benefit of a 'tax cut'.


As to lower taxes leading to the Celtic Tiger, or even playing a major part, then the figures don't appear to add up. If you take the period 1990-1993, then it suggests that lower taxes create unemployment!

Year Top_rate Unemployment_rate
1990 53% 12.9%
1991 52% 14.7%
1992 52% 15.1%
1993 48% 15.7%
1994 48% 14.7%
1995 48% 12.2%
1996 48% 11.9%
1997 48% 10.3%
1998 48% 7.8%
1999 46% 5.7%
2000 46% 4.3%
2001 44% 4.1%
2002 42% 4.3%
2003 42% 4.5%
2004 42% 4.3%

Sources:
http://www.gpn.org/data/ireland/ireland-data.pdf
http://www.progressivedemocrats.ie/about_us/coalition_government_1989_to_1992/
http://www.dallasfed.org/news/educate/2003/03apsummit_wynne.pdf
http://www.cia.gov/cia/publications/factbook/geos/ei.html

Cork

Coperation Tax is 12.5%

Why should Irish workers be poaying more that the coporation down the road?

The PDs are right - take those earning 20k out of the tax net.

It is about time that we had a debate on tax.

Charlie McCreeve cut capital gains tax from 40% to 20%.

There was outcry among the begrudgers and the opposition. These people lacked the vision of McCreevy.

But Hey! This country is actually taking more in with regards to capital gains tax.

NewDubliner

Cork wrote:

But Hey! This country is actually taking more in with regards to capital gains tax.

Would that be because indexation relief was stopped?

Victor

Victor wrote:

How can income tax at 42% and PRSI at 4% add up to 50%?

Cork, are you avoiding the question?

Cork wrote:

Charlie McCreeve cut capital gains tax from 40% to 20%. There was outcry among the begrudgers and the opposition. These people lacked the vision of McCreevy.

Cork, why are we taxing workers more than speculators. Workers add to the economy, speculators add nothing.

democrates

It gets worse victor.
Ever heard of an SSAP?
Small Self-Administered Pension.
It allows certain business people to put up to 200k per year tax free into this structure (ceiling only recently introduced).
So that's 200k avoiding income tax for starters.

This fund can then be leveraged to invest in say buy to let property (eg at 80% loan to value that's up to 1 milion euro per year).
The income tax from these buy to let investments is, zero.
The capital gains tax from these buy to let investments is, yes zero.
Is there any wonder we have a property boom.

Great, for the chosen few, but of course you must understand that such escapes from equitable contribution to the exchequer are not appropriate for the rest, for those lowly units of labour, those vast masses of PAYE battery hens. Just lay your eggs and count yourself lucky, remember your station in life.

samb

Cork wrote:

Charlie McCreeve cut capital gains tax from 40% to 20%.

There was outcry among the begrudgers and the opposition. These people lacked the vision of McCreevy.

But Hey! This country is actually taking more in with regards to capital gains tax.

Hasn't this contibuted to our ridiculous house prices? I think politians are not raising this as a big issue because most voters probably own thier own home already. there is now a big divide between the have homes and the have nots.
I support low (present) corporation tax and low capital gains tax but think that they should introduce a tax on investment properties (30% instead of 20% from capital gains) in order to cool down the market and allow younger people to own thier own homes.

Delboy05

Victor wrote:

Originally Posted by Victor
How can income tax at 42% and PRSI at 4% add up to 50%?
Cork, are you avoiding the question?

Victor, is’nt there also the 2% health levy to take into account on top of the 4% PRSI, which brings it to 48% for those on the top rate. Not far from 50%!!!

Commander vimes wrote:

edit: here's an example of budget cuts. my friend works in the postal service. his manager gets them to do regular overtime and then tries to get out of paying them for it. its not his fault. the work has to get done and it requires a certain amount of man power. the govt won't give the manager enough money to hire the required number of people so he has to make the current employees work overtime without pay.

Commander vimes wrote:

perhaps they're sick all the time because they're overworked without pay? surely there's a reason there's a higher sick rate with postmen than other public services. you can't simply say "stop getting sick" and hope the problem solves itself.

The postal service is a semi-state organisation and thus received no direct funding from the govt. An Post despite what many believe, has made profits in far more years that it’s made losses. And this is despite the archaic work practices in the company
i.e. many post routes take less than 8 hours to complete especially in the cities. Say postman X does his route in 4 hours every day – he gets his 8 hours pay as usual. But then postman Y who has the same hours on his route rings in sick. Postman x is asked to fill in and says yes….but to do so he has to get 8 hours overtime. So for the 8 hours he’s worked in total that day, he gets his 8 hours pay at standard rates for his original route and 8 hours in overtime pay for the extra route. And Postman Y is at home still collecting his 8 hours pay!!!!
That’s part of the reason An Post is in the ****s and the company is being let run into the ground….the unions refuse to give up work practices like this no matter what, and the mgmt with govt backing are saying no more investment/no more improvements until things start to change and everyone enters the 21st century.

Cork

Victor wrote:

Cork, are you avoiding the question?
Cork, why are we taxing workers more than speculators. Workers add to the economy, speculators add nothing.

I am not avoiding any question. I agree with you - workers add to the economy. Speculators do not.

I would like to see a sales tax on houses that are not your principle private residence.

I would like to see tax on second houses.

Why do we just tax people who earn above the minimum wage?

The PDs are right that people earing < 20K should not pay tax.

billy the squid

Cork wrote:

Coperation Tax is 12.5%

Why should Irish workers be poaying more that the coporation down the road?

The PDs are right - take those earning 20k out of the tax net.

The problem is though, while they want to take people out of the tax net, They are screwing them for even more money by increasing the cost of certain things like the drugs payment scheme.

Charlie McCreeve cut capital gains tax from 40% to 20%.

There was outcry among the begrudgers and the opposition. These people lacked the vision of McCreevy.

Charlie McCreevey generated outcry because he gave his buddies in the horsie sector a get out of tax free card. He also introduced levies on credit cards which also hurt the ordinary worker.

Victor

Delboy05 wrote:

Victor, is’nt there also the 2% health levy to take into account on top of the 4% PRSI, which brings it to 48% for those on the top rate. Not far from 50%!!!

You forget about personal and PAYE tax credits, mortgage interest relief, etc. PRSI stops at about Eur45,000 It means all the deductions never add up to more than about 45%, and only about 100 people in the country are paying that.

Time Magazine

Victor wrote:

Workers add to the economy, speculators add nothing.

Hmm this isn't true. (I've only come round here since the Feedback thread, so I'm not getting involved). Speculators can provide substantial investment, which grows the economy.

To quote Keynes, and although he wasn't directly referring to speculators the sentiment is applicable, "the superfluity of the rich" dictates the economy.

billy the squid

billy the squid wrote:

Charlie McCreevey generated outcry because he gave his buddies in the horsie sector a get out of tax free card.

Did he really?

Many of us laboured under the impression that it was introduced in the Haughey era, specifically the Finance Act of 1969 as amended by the Finance Act of 1985. In the interests of clarity and to avoid the suggestion that you were just throwing mud for the sake of it, could you specify when Charlie McCreevy gave 'his buddies' this tax break? Maybe reference to a Finance Act and section would help.

A for the PDs and tax breaks, they'd get a vote off me if I could be certain they would introduce such cuts, but there's the rub...

Glenbhoy

Luckily whatever the PD's say is pretty much irrelevant, my only fear is that some of the other real parties take up on this vote-grabbing plan, this may be happening as we speak though, as it appears that Bertie has stated that further tax cuts may be on the cards.
The last thing this country needs at this present moment is further tax cuts - consumer spending is at all time highs (not that that would be difficult given our base level), indebtedness is accelerating, SSIA's are maturing, sure why don't we just add a healthy dose of petrol to that frenzy of consumerism?
In any event, any such tax cuts would be quickly eaten up by inflationary pressures, that would be basic economics.
Presuming tax cuts were in any way sensible at this present time (which obviously they are'nt - see ESRI report of yesterday) the equitable way to enact them would be to increase the lower level tax band only, this would have the effect of giving everyone in the economy exactly the same amount of a tax saving. Alternatively, additional tax credits could be awarded to all individuals. The problem with the PD's proposals are this:
The more you earn at 42/40%, the more you save, this could be interpretated as regressive, in effect, what they are suggesting is a reduction in tax for the wealthier persons in the economy, but they are dressing it up in such a way that it's aimed at the poor. It think Gearge Bush enacted similar tax breaks for his cronies when he came to power.
Anyway as I said earlier, we should'nt get too worked up, after all 96% of the electorate can't be wrong!!

Victor

Angry Banana wrote:

Speculators can provide substantial investment, which grows the economy.

While they may provide investment, that investment does not add to GDP as it is eventually taken out.

Farmer - buys land, improves land, farms land, sells produce
Speculator - buys land, hoards land, sells land
Developer - buys land, improves land (provides infrastructure, gets planning permission), builds houses, sells houses

See any difference?

Time Magazine

In that situation you're right. But banks, as such, are speculators for a living. If prices are higher, it can encourage people to work more to buy it - thus being productive.

Whether it's good for society or not is a much bigger issue.

regi

Entrepreneurs suffer from CGT, but can seriously aid an economy.

- Starts business (borrows money, money floating around is useful)
- Hires people (Good)
- Exports goods/services (DoublePlus Good)
- Sells business (CGT)

The idea of a non-residential property sales tax is interesting, but property is still pushing all the right buttons in the construction trade, which is employing a lot of people and encouraging immigration.

Victor

Angry Banana wrote:

In that situation you're right. But banks, as such, are speculators for a living. If prices are higher, it can encourage people to work more to buy it - thus being productive. Whether it's good for society or not is a much bigger issue.

Financial institutions are a different case, yes at times they do hoard, but the vast majority of their business is investment at a multiple of their deposits.

Regi wrote:

The idea of a non-residential property sales tax is interesting, but property is still pushing all the right buttons in the construction trade, which is employing a lot of people and encouraging immigration.

I would prefer a move towards a VAT/CGT-like régime for property where expenses are set off against sales. Stamp duty is a transaction tax and discourages turnover.

samb

My dad recently got a really generous share-option, presumably as a reward for this hard work etc. His gains from this however must be taxed as income 42%. I find it strange that because he did not buy these shares in the normal way that he must be taxed extra.
Couldn't all income (from capital gains or whatever) be taxed in this way (along with income tax)? or would it be unworkable for some reason? If this was done then the income tax levels could probably be reduced to 40 or lower without any loss in revenue. This would seem like a more fair arrangement as it would tax working people the same as those living off investements.

Time Magazine

Samb, those with investments (in general) already pay more than their fair share.

Just over 25,000 people, 0.6% of the population, pay 33% of the income tax yield.

Regarding speculation, another good example is ticket touts. Now personally I think touts should be banned because the externalities associated with them are too great (such the human disappointment of having to pay more for a ticket than the person beside you), but in a purely economic sense they're very useful.

Delboy05

Glenbhoy wrote:

Luckily whatever the PD's say is pretty much irrelevant, my only fear is that some of the other real parties take up on this vote-grabbing plan, this may be happening as we speak though, as it appears that Bertie has stated that further tax cuts may be on the cards......Anyway as I said earlier, we should'nt get too worked up, after all 96% of the electorate can't be wrong!!

Good grasp of politics there Glenbhoy.....I'd say, if taken at the % of dail seats they hold, the PD's have been 1 of the most influential political parties this island has ever seen. Whether you agree with them or not, thats another story. But for their size, and the fact they've been in the last few govt's, has any other party of their size ever punched so far above their weight?

samb

samb wrote:

I find it strange that because he did not buy these shares in the normal way that he must be taxed extra.

The value paid for them though was income to your father and ergo had to be taxed-thats only fair.
You cannot expect to receive income, no matter how hard you work and expect not to be taxed on it at whatever marginal rate,if you are within the tax net.
He could buy the exact same amount of shares out of his own pocket and he wouldnt have had to have paid tax on the value of those as he was already presumably taxed on that income.
What you are decsribing is a situation where your father is being taxed once on income earned(albeit income paid to him in an alternative way)

He'll be taxed at 20% on the capital gain on any of the shares when he sells them,thats an entirely different and inescapable tax-it's not that he is being taxed twice or anything via the companies alternative way of paying him.
Though that income is taxed at the same rate as if they paid your Dad in cash, your Father may well do better out of it if he capitalises on those shares at a higher value than they were when he got them.
He'll get to keep 80% of the gain minus share dealing costs.So he should still really be on a win win. I know share prises rise as well as fall but as you know this carefully watched can lead to a decent return.

Do you follow?

fly_agaric

Angry Banana wrote:

Samb, those with investments (in general) already pay more than their fair share.
Just over 25,000 people, 0.6% of the population, pay 33% of the income tax yield.

Just wondering...what would be a "fair share" of income tax in your opinion?

You seem to be using that stat. (if correct) to argue that the income tax take should be spread quite evenly over the entire population regardless of income.

High income earners would then pay practically nothing relative to their wealth because they are only a small sector of the population.

This doesn't seem "fair" to me - especially in a country with a high VAT rate and lots of little stealth taxes that are totally "flat" and don't discriminate:rolleyes: against the wealthy.

galactus

This Election ploy by the PDs must be one of the most cynical things to happen in Irish politics in a while.

A ploy that has a good chance of working since there are seemingly no end of muppets in this country.

Does the average muppet think that they will actually end up with a better standard of living? (Having "more money" in your pocket is of course meaningless if prices rise at a faster rate).

The two current PD ministers, McDowell and Harney, are hardly covering themselves in glory at the moment. For your own good, please vote in the next election (hopefully not for the PDs).

fly_agaric

fly_agaric wrote:

High income earners would then pay practically nothing relative to their wealth because they are only a small sector of the population.

I dont think its fair that just because you are sucessfull/earn a lot of money that you should pay a higher proportion of your earnings to the tax man.
I'm not saying that you shouldnt have higher rates for higher income,I'm saying you shouldnt set out to blatantly take more off a high earner or invent a new ridiculously high rate for them.
That goes against the principle of incentive in my opinion.

This doesn't seem "fair" to me - especially in a country with a high VAT rate and lots of little stealth taxes that are totally "flat" and don't discriminate:rolleyes: against the wealthy.

Surely a high earner is usually spending more and therefore contributing more in VAT and more in stealth taxes to the exchequer than a low earner and ergo the "totally flat" principle is not the catch all disproportion you make it out to be.

Thats something I think that is lost often in the hurry to condemn people whose only crime is that they have perhaps worked hard to earn more money.
I doubt that those who propose it would be so quick to dilute what they expect off the state in favour of the richer people who contribute more in money terms to it.
That would be a continuation of the logic but fairness and equity demands that it is not the case.
For example, a Richer person will get the same contributory OAP as a poorer person etc...